Rita Crundwell, Former Dixon Comptroller, Charged in Federal Indictment with $53 Million Fraud Since 1990

The former comptroller of the city of Dixon, Illinois, Rita A. Crundwell, was indicted today for allegedly fraudulently obtaining more than $53 million from the town since 1990 and using the proceeds to finance her horse breeding business and lavish lifestyle. A federal grand jury returned a single-count indictment charging Crundwell with one count of wire fraud, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation. Since Crundwell was arrested on April 17 and accused of misappropriating more than $30 million since 2006, further investigation resulted in the indictment’s expanded allegation that the fraud exceeded $53 million and spanned more than two decades.

Crundwell, 59, of Dixon, who served as comptroller since 1983 and handled all of the city’s finances, was released on her own recognizance on April 18. She will be arraigned at 10:30 a.m. on May 7 before U.S. Magistrate Judge P. Michael Mahoney in U.S. District Court in Rockford.

The indictment seeks criminal forfeiture of $53 million as well as numerous assets that were seized from Crundwell when she was arrested. On a parallel track, the United States today filed a civil lawsuit alleging that 311 quarter horses owned by Crundwell are subject to civil forfeiture because she purchased and/or maintained them with criminal fraud proceeds. The government will seek eventually to sell the horses and apply the proceeds toward restitution to the city of Dixon.

“The government is pursuing both criminal and civil forfeiture proceedings to ensure that every available tool is being used to recover proceeds of the alleged fraud in order to recoup as much money as possible for the city of Dixon, its residents, and taxpayers,” Mr. Fitzgerald said. The investigation is continuing, he added.

Dixon, with a population of approximately 15,733, is located about 100 miles southwest of Chicago.

Crundwell owns RC Quarter Horses, LLC, and keeps her horses at her ranch on Red Brick Road in Dixon and at the Meri-J Ranch in Beloit, Wisconsin, as well as with various trainers across the country. In addition to 311 registered quarter horses, dozens of foals are expected to be born this spring. As part of the civil lawsuit, the government requested a pretrial restraining order that will secure the government’s interest in the horses and allow officials to take necessary steps to ensure the animals’ health and well-being, including veterinary and dietary care, which has been ongoing. The U.S. Marshals Service is expected to hire a contractor to manage the horses.

The indictment seeks criminal forfeiture of two residences and the horse farm in Dixon; a home in Englewood, Florida; a $2.1 million luxury motor home; more than a dozen trucks, trailers, and other motorized farm vehicles; a 2005 Ford Thunderbird convertible; a 1967 Chevrolet Corvette roadster; a pontoon boat; approximately $224,898 in cash from two bank accounts; and other assets allegedly purchased with fraud proceeds. Many of these assets were seized when Crundwell was arrested, and the government today requested a restraining order on the real estate that is allegedly subject to criminal forfeiture.

According to the indictment, on Dec. 18, 1990, Crundwell opened a bank account in the name of the city of Dixon and RSCDA, known as the RSCDA account. Between December 1990 and April 2012, Crundwell used her position as comptroller to transfer funds from the Dixon’s Money Market account to its Capital Development Fund account, as well as to various other city bank accounts. Crundwell allegedly repeatedly transferred city funds into the RSCDA account and used the money to pay for her own personal and private business expenses, including horse farming operations, personal credit card payments, real estate, and vehicles.

As part of the fraud scheme, Crundwell allegedly created fictitious invoices purported to be from the state of Illinois to show the city’s auditors that the funds she was fraudulently depositing into the RSCDA account were being used for a legitimate purpose. To conceal the scheme, Crundwell told the mayor and city council members that the state was late in its payments to the city, when, in fact, she knew that she had fraudulently transferred the funds for her own use, the indictment alleges.

Wire fraud carries a maximum penalty of 20 years in prison, and a $250,000 fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is represented in the criminal case by Assistant U.S. Attorney Joseph C. Pedersen, and in the civil case by Assistant U.S. Attorney Scott Paccagnini.

The public is reminded that an indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to an indictment by a federal grand jury and a fair trial at which the government has the burden of proving her guilt beyond a reasonable doubt.

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Family Secrets Mob Trial Convictions Upheld

An appeals court has upheld the convictions of several reputed mobsters in a landmark trial credited with delivering a body blow to Chicago's mob. But Tuesday's opinion cited at least one trial error. And a dissenting judge argued two defendants' convictions should have been reversed.

The defense asked the 7th Circuit Court of Appeals for a do-over of the 2007 Family Secrets trial. Their grounds included that Judge James Zagel talked to a panelist privately who told him she felt threatened. He later dismissed her.

The court said Zagel should have told attorneys about the comment but found the error was harmless.

Dissenting in part, Judge Diane Wood said she would have overturned Frank Calabresse, Sr., and James Marcello's convictions on grounds they'd been tried previously for the same crimes.

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Mob Wives Chicago Video Promo

Get More: TV Shows, Full Episode Video, Reality TV Shows

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Does Big Government Choose Your News?

Corydon B. Dunham’s “Government Control of News” study was expanded and developed for the Corydon B. Dunham Fellowship for the First Amendment at Harvard Law School. Dunham was an NBC legal executive from 1965 to 1990.

A proposed new plan for government control of television news, and perhaps Internet news, is now pending before the Federal Communications Commission. It would enable the government to suppress opposing points of view, reduce diversity and chill speech.

The new Localism, Balance and Diversity Doctrine has much in common with the FCC’s old Fairness Doctrine – a policy the agency itself found deterred and suppressed news and chilled speech and which it revoked in 1987. An FCC-sponsored Future of Media Study has recommended that the Localism Doctrine proceeding be ended as ill advised but FCC Chairman Julius Genachowski has refused; the administrator of the White House’s Office of Information and Regulatory Affairs, Cass R. Sunstein, has long recommended that the government regulate news content broadcast by stations to advance the incumbent government’s political and social objectives.

The new doctrine would suppress news, impose unnecessary and heavy burdens on television station news and be enforced by threats of license termination from both the FCC and a local control board at each station. Under the proposed plan, news broadcast by television stations would have to satisfy government criteria for “localism” in production and news coverage – as well as government criteria for balance and viewpoint diversity.

Internet news sites stand to be affected as well. The FCC is planning to transfer the broadcast spectrum used by local television to the Internet and the agency already has begun regulating the Internet.

Five federal communications commissioners in a central government agency in Washington, D.C., would review local news. The majority vote of three commissioners appointed by the president would make a final determination of news acceptability, overriding the news judgments of thousands of independent, local TV reporters and editors. The stations would be threatened with loss of their licenses to broadcast if found to be non-compliant.

In addition, a local control board would be appointed for each television station to monitor its programming, including news, and recommend against license renewal if board members concluded the station is not complying with the FCC policy. This would impose a new blanket of government control over news. Much of the proposed new rule has not been made public including, for example, who would appoint the members of the local boards.

Requiring journalists to comply with a central government agency’s policy on how to report the news and what the news should be means those journalists would no longer be free and independent of government. If the broadcast press is not free and independent, it cannot act as a watchdog for the public, which is its constitutional role.

News gathering is not just taking government handouts; it’s probing sources for what is really going on. It’s important that the TV and radio press continue to be able to do that so the public will be informed. FCC history shows government regulation of news content deters and prevents effective news-gathering.

Corydon B. Dunham is a Harvard Law School graduate. His new book, “Government Control of News: A Constitutional Challenge", details the study tracing the history of the FCC’s Fairness Doctrine and development of the Localism, Balance and Diversity Doctrine. As an NBC executive for 25 years, Dunham oversaw legal and government matters and Broadcast Standards. He served on the board of directors of the National Television Academy of Arts and Sciences and American Corporate Counsel Association.

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Attorney Joseph R. Lopez, "The Shark", Brings Trial Winning Streak to Drew Peterson Case & Closing Argument

The criminal defense attorney who will deliver the closing argument when Drew Peterson goes on trial is on a roll, having won all three of his most his most recent jury trials, including two where his clients were charged with murder.

Attorney Joseph R. Lopez is best known for representing members of the Chicago Outfit. When Lopez was growing up in Chicago’s Little Italy neighborhood, he was given the nickname “the Shark.”

Lead Peterson defense attorney Joel Brodsky tapped Lopez to join the defense team because of his skills and success at delivering closing arguments.

“I chose Joe because he is good at what he does,” says Brodsky. “It wasn’t a stroke of genius. It is about assembling a winning team and Joe’s track record reinforces to me that I made the right decision in giving him the closing argument.”

Two of Lopez’s recent cases were murder trials. The third involved accusations of armed robbery and extortion. Lopez delivered closing arguments in all three cases and all three defendants were found not guilty.

The closing argument is the final argument made by an attorney during a trial. It represents a summation of the evidence. Closing arguments are the last chance to talk to the jury and impact their decisions. And the closing argument is considered within the legal community to be an art form of sorts.

“The closing argument is one of the most important parts of a trial, as the entire trial leads up to the summation. The argument is especially significant if the outcome of the trial is too close to predict,” according to the website caught.net. “At that point, all that matters is the attorney’s last minute attempt to persuade the jury to find in favor of his or her client.”

Peterson is charged with murder in the death of his third wife, Kathleen Savio. Her death originally was ruled an accidental drowning but authorities later determined it to be a homicide that was staged to look like an accident. Peterson vehemently denies any connection to Savio’s death.

Peterson’s fourth wife, Stacey, disappeared several years ago and though a suspect, he has not been charged in connection with that case.

Last week an appellate court ruled that hearsay evidence would be allowed to be presented at trial, which means two of Peterson’ ex-wives will likely “testify” during the trial even though one is dead and the other is missing. 

Peterson has been in jail since May 2009 since police arrested and charged him.

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